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ISSUE 11 AUTUMN 2000
1
Clear Water Bay, Kowloon, Hong Kong
Insidethis
issue:
Marking yet another major
m i l e s t o n e i n i t s
d eve l o p m e n t , t h e H K U S T
Business School recently achieved
full accreditation by the European
Foundation for Management
Development (EFMD). Together
with the accreditation awarded by
A AC S B - t h e I n t e r n a t i o n a l
Association for Management
Education in 1999, the School
now has become one of a very
few institutions in the world to be
accredited by both of these two
major, internationally recognized
quality assurance processes for
business schools.
In fact, the HKUST Business
School is the first Asian school to
be accredited by EFMD since the
Founda t ion in t roduced i t s
accredit ing mechanism, the
European Quality Improvement
System (EQUIS) in 1997. To date,
a to ta l o f 37 management
education institutions have been
accredited. They are mostly
European schools such as
he School announced the launch of the
Professional Cer tificate in eCommerce
Online Program in September. The program is
offered in collaboration with Edport.com Limited
(Edport), a subsidiary of Affirm Score Limited. This
is the first time that online courses of this nature
are available to people in both Hong Kong and the
region.
The program comprises four courses, including
Foundations of eCommerce, eCommerce Economics
and Strategy, eCommerce Marketing and Business-
to-Business (B2B) eCommerce. According to the
developer of the courses, Theodore Clark, Associate
Professor of Information and Systems Management,
“The Wall” game...page 2 Student on winning spree...page 8Agreement sealed...page 7
DUAL ACCREDITATION IN TWO YEARSCopenhagen Business School
(Denmark), INSEAD (France),
IMD-International Institute for
Management Deve lopment
(Switzerland), Cranfield School of
M a n a g e m e n t a n d L o n d o n
Business School (both in UK).
Dean Yuk-Shee Chan of the
HKUST Business School was
delighted with the recognition of
quality bestowed on the School by
EFMD. “For the School, this is a
great honor. Like the AACSB
accreditation that we received last
year, EFMD’s EQUIS accreditation
is based on objective criteria and
a stringent evaluation process by
experts in the field. This recognition
also marks a major breakthrough
in the development of the quality
and status of management
education in Hong Kong and Asia
as a whole,” he said.
The scope of the EFMD’s
EQUIS accreditation covers all
activities conducted by a business
school, including all of its degree
programs, executive education
offerings and research projects.
The EQUIS process entails three
main stages. The initial stage
requires a candidate school to
submit basic information and the
EQUIS director to conduct a one-
day visit on site to verify eligibility
of the school. The second stage
involves the compilation of a self-
evaluation report by the school and
a site visit by a peer review team
from EFMD. At the final stage, the
EFMD Accreditation Awarding
Body reviews the case and makes
the final decision, taking into
consideration the recommendations
made by the peer review team.
In the case of the HKUST
Business School, the peer review
team comprised senior academics
and a local corporate repre-
sentative, namely, Professors
Gordon Shenton, EQUIS Director,
Christ ian Delporte, Director
International Affairs, Institut
d’Administration et de Gestion,
LAUNCH OF PROFESSIONAL CERTIFICATE INE-COMMERCE ONLINE PROGRAM
the courses are based on the “Active Learning”
philosophy which emphasizes participation and real-
time discussion. There is a high level of interaction
allowing knowledge sharing between the tutor and
students all over the world.
Dean Yuk-Shee Chan said, “we are pleased to
be able to collaborate with Edport to launch these
courses, which allow busy executives to study
conveniently and easily,” Dean Chan said.
“With the rapid development of eCommerce in
Asia, there is a keen demand from both business
and IT executives in the region for new knowledge
and information in the field. The combined strengths
Université Catholique de Louvain,
Belgium, Chris Greensted, Dean,
Plymouth Business School, UK,
and Stuart Leckie, Chairman,
Woodrow Milliman China Ltd.
The European Foundation for
Management Deve lopment
(EFMD), based in Brussels, is
Europe’s forum for information,
research, networking and dialogue
on innovation and best practices
in management development. It
has 390 member organizations in
over 40 countries. Among the
members are leading business
schools and executive develop-
ment centers, companies, public
services and training agencies,
managemen t cen te r s and
institutions, consultancies, and
individual members. It is the
spokesman for management
development in Europe.
EFMD website:
www.efmd.be
Dean Yuk-Shee Chan (right) presents a souvenir to Professor Gordon Shentonon the completion of the peer review team’s visit on the HKUST campus.
T
(cont’d on page 7)
E-LIBRARY WINSINTERNATIONAL
A n e l e c t r o n i c l i b r a r y
(eLibrary) developed by a
team of researchers led by Kar Yan
Tam, Professor of Information and
Systems Management, was one of
the top winners of the Stockholm
Challenge Award 2000.
The award is a coveted IT
award administered by the city
government of Stockholm in
Sweden and by the European
Commission.
The Stockholm Challenge
lauded the eLibrary a structural
innovation in the development of
distance education. The key
features of it include a common
user interface that allows easy
access to l ib rar y ser v ices
regardless of users’ information
literacy levels, digitization of
Chinese texts and a full-function
Chinese search engine. The
system’s sophisticated handling
o f C h i n e s e t ex t p r ov i d e s
comprehensive support for a solid
bilingual operating environment for
the users. (cont’d on page 2)
2
The Hong Kong University of Science & Technology
his year’s full-time MBA graduates are already hard at work. The placement statistics
are remarkable both in terms of salaries and the speed in landing a job. At the end of
September, only three months after their last exam, virtually all (24 out of 25) of the class
have received job offers.
The offers have been made from multinational companies such as ExxonMobil, GE Capital,
Goldman Sachs, Lombard Investment and Morgan Stanley Dean Witter. The GE Capital job
is an international position offered directly from the firm’s Stamford office in the US. The
HKUST graduate is the only successful candidate from a Hong Kong business school among
the 20 new recruits selected by the firm through a global recruitment process.
Some graduating students have received offers from technology companies such as 2cube.
com, Autofreeways.com, OgilvyOne Worldwide and Web Connection. A few others will venture
into start-ups yet to be named.
The average annual salaries offered by the multinationals are HK$450,000. Some of the
HKUST graduating MBA full-time students were offered annual salaries from HK$500,000 to
HK$700,000, comparable to salaries offered to graduates from top US business schools.
Assistant MBA Placement Director Doris Chan said this year’s job offers attained by
graduates of the program sent a positive signal to the other multinationals. “We are pleased
that the qualities of our students are being recognized. This year’s successful recruitment of
local talent should encourage more multinational companies to focus on HKUST MBAs,” she
said.
The new full-time MBA class this year
showcases an impressive increase
in the number of international students.
Among the 28 new students, 12 (some
43%) are from outside of Hong Kong and
t h e C h i n e s e M a i n l a n d . P l a c e s
represented include France, India,
Japan, Korea, Malaysia, the Philippines
and Thailand.
According to Program Director Steve
DeKrey, the increase is in line with the
School’s objective. “We have been focusing
on attracting more foreign students to make
the program more diversified and dynamic.
We plan to achieve an even split between
Hong Kong and international students in
our full-time MBA class,” he explained.
When asked about the reasons behind
the growing interest in the program from
the international community, DeKrey
attributed the phenomenon to the lure of
the China market, as well as the stellar
reputation the School has established over
the years. “Many students from abroad use
MBA PROGRAM SEES SURGING INTERESTS FROM ABROAD
Students of the MBA 2000 incoming class participate in a team building game called “The Wall”,The game requires the participants to support each other with the ultimate goal of the entire team
being on the top of a wall within a designated limit of time.
EXCEPTIONAL YEAR OF FULL-TIMEMBA PLACEMENT
the MBA degree as a springboard to launch
into the job market in Asia. The reputation
of the university and the quality of faculty,
the curriculum, and the placement service
of the program become very important
when it comes to which program to choose.”
He cited the Financial Times’ ranking coup
and the AACSB and EQUIS accreditation
that the School attained recently as
testimonial to its quality and international
standing.
Karine Fabre was a lawyer when she
enrolled in the full-time program. Grown up
in France, Fabre was very interested to
develop her career in Hong Kong. “I came
to Hong Kong with my husband five years
ago and have been working in a law firm
for almost four years. When I was charged
with the responsibility of managing the
renewals department for my firm, I realized
that it was about time to upgrade myself if I
wanted to go further.” Fabre was very
excited that she has made the right choice.
“The program here is truly international.
With a diverse group of faculty and
Karine Fabre, front row first from left, and herclassmates during the residential program.
Over the past two years, the project
has generated widespread interest
among peer institutions from all over the
world. It has become a model for other
universities, engaged in both distance
learning and conventional on-campus
instruction, to follow.
Tam is delighted that the eLibrary
project received international acclaim
and recognition. “The award is a boost
to IT education and the advancement of
Hong Kong. It proves that Hong Kong is
capable of developing and applying
advanced technology for the betterment
of society.”
The Stockholm Challenge offers IT
pioneers from the private, public,
academic and non-profit sectors from
around the world a unique opportunity
to showcase projects of excellence. In
the past two years, the award program
attracted entries from 700 IT projects
from more than 250 cities and 60
countries. This year, the Challenge
received 612 entries from Africa, Asia,
Australia, Europe, and North America,
wh ich were d iv ided in to seven
categories. Evaluation was based upon
four criteria: innovation, user need,
sustainability, and transferability. The
eLibrary was one of the three joint
winners in the “Education” category
which included some 200 entries.
The victorious eLibrary was a HK$40
million project commissioned by the
Open University of Hong Kong. The
system was launched in 1998 to provide
web-based library services to the
distance learners, tutors and staff of the
Open University.
E-LIBRARY WINS INTERNATIONAL(cont’d from page 1)
students, it is a very good opportunity to
learn the essence of global business.”
The new class started with an intensive
residential program at the end of August.
This 5-day experiential learning program is
part of the core course “Managerial
Problem Solving”. Associate Program
Director Chris Tsang said the residential
week enables new students to build closer
bonds among themselves and to improve
their teamwork and leadership skills
through active participation in group
exercises.
Total Enrollment 28
Men 54%
Women 46%
Average Age at Entry 28
Age Range 24-36
% of Non-local 43%
Average Years of Full-time Work 6
Work Experience Range 2-10
Full-time MBA Student Profile 2000
T
PROMOTION
3
HKUST BUSINESS SCHOOL – Newsletter
Dean Yuk-Shee Chan
FROM THE DEAN
G reetings at the start of another new
school year! While the past summer
was a recess for our students, we were busy
as usual here at the School. We are delighted
to report in this Newsletter the various
developments over the summer such as the
EQUIS accreditation, executive education
offerings and research achievements. In
addition, I am very pleased to report in more detail in this column the excellent
admission results of our MBA and undergraduate programs.
Our MBA programs (both full- and part-time) garnered more records this
year. Overall, we enrolled 150 new students, a 16 percent increase over last
year. With a record 75 percent yield ratio, the part-time program enrolled 122
new students -- the largest part-time MBA class in the School's history. The
most gratifying news is that in spite of the nearly 25 percent increase in size,
the profile of the new class is every bit as strong as that of last year in terms
of maturity and work experience.
While the number of students in the full-time MBA category remains at
28, the same as last year, the new class has a substantially stronger
international profile with students from seven countries in addition to those
from Hong Kong and the Chinese Mainland, namely, France, India, Japan,
Korea, Malaysia, the Philippines and Thailand. The new full-time class also
set a record in work experience, with an average of six years of on-the-job
experience.
Equally pleasing are the undergraduate admission results. According to
figures published by the local Joint University Programs Admission System
(JUPAS), the HKUST business programs were the most popular choice among
secondary school graduates this year with one in ten selecting our programs
as one of their Band A (first preference) choices. In terms of academic scores,
over 20 percent of the students in the School's newly admitted class have
attained results classified as in the highest level by the School, with the rest
in the middle to high categories.
These admission results signify a strong endorsement of the School's
programs. In addition to program content and classroom teaching, the School
believes that early exposure to the business environment is important in
developing students into successful business executives. To this end, the
School has proposed collaborative partnerships with major corporations to
provide students with internship and work-study opportunities as well as
financial support for their participation in international exchange and other
enrichment programs. A number of new initiatives are in the pipeline and I
expect to share with you more details of them in the next issue.
HKUST Business School
Dean: Yuk-Shee Chan
Associate Deans: K.C. Chan, Steve DeKrey, Kar Yan Tam
Newsletter Editors: Elaine Chu, May Hung
Sub-editor: Virginia Unkefer
Contact us: bmpr@ust.hk, fax: (852) 2358 1467
Website: http://www.bm.ust.hk
© 2000 by the School of Business and Management, the Hong Kong University
of Science and Technology. All rights reserved.
Professor Jiing-Lih Larry Farh has been named the Head of the Department of Management
of Organizations with effect from 1 July. Professor Anne Tsui, who served as the founding
head of the department, will return to full-time research and teaching.
Farh has been Professor of Management of Organizations since
1997. He received his PhD from Indiana University in 1983, with a
specialization in Organizational Behavior and Personnel. Prior to joining
the University as Senior Lecturer in 1993, Farh served on the faculty
of the Louisiana State University for nine years. Prof. Farh is one of
the founders of the department and has been the deputy head of the
department since 1995.
Announcing the appointment, Dean Yuk-Shee Chan welcomed
Prof. Farh to his new role and also thanked Prof. Tsui for her six years
of dedicated service in leading the department.
LARRY FARH APPOINTED HEAD OFMANAGEMENT OF ORGANIZATIONS
Congratulations to the six faculty members
on their recent promotion.
Effective 1 July 2000, Kalok Chan,
Jeongwen Chiang and Inchi Hu were promoted
to Professors of Finance, Marketing and
Information and Systems Management
respectively; Chul Won Park became Associate
Professor of Accounting; Theodore Clark and
Shaohui Zheng were made Associate
Professors of Information and Systems
Management.
Kalok Chan came to HKUST in 1995 as
Visiting Associate Professor. He was Associate
Professor of Finance at Arizona State University
when he joined HKUST as Associate Professor
in 1998. His research interests focus on the
dynamics of asset prices; market micro-
structure; and international financial markets.
Jeongwen Chiang had been on visiting
terms with HKUST from 1996-97 before he
joined the School in 1997 as Associate
Professor. He was recruited from Washington
University, where he was Assistant Professor
from 1992-1997. His research interests focus
on measuring promotional effects on consumer
choice; shopping basket studies; new product
development; and customer satisfaction
research.
Inchi Hu was a member of the School’s
FACULTY PROMOTIONfaculty since 1994 as an Associate Professor.
Prior to that, he was Assistant Professor at
University of Pennsylvania from 1986-93. His
research interests are sequential analysis;
stochastic control; stochastic process; and
statistical inference.
Chul Won Park joined HKUST in 1994 as
Assistant Professor. He had been working for
San Tong & Co. (Peat, Marwick, & Michell)
before joining academia. His research interests
are earnings management; CEO performance
evaluation; analysts forecasts; and equity
valuation.
Theodore Clark was with McKinsey & Co.
(1985-90) and International Business Machines
(1982-84) before he joined HKUST as Assistant
Professor in 1994. His research interests
include electronic commerce; IT strategy;
telecommunications policy and strategy; EDI;
inter-organizational systems; and process
redesign.
Shaohui Zheng came to HKUST in 1994
as Assistant Professor. He previously taught
at Columbia University as Adjunct Professor
(1997) and Shandong Institute of Technology
and Mining (1987-89) as Lecturer. His research
interests are quality control; supply chain
management; queuing systems; and Markov
decision programming.
Larry Farh
Kalok Chan Jeongwen Chiang Inchi Hu
Chul Won ParkTheodore Clark Shaohui Zheng
4
The Hong Kong University of Science & Technology
WHY SOME FDIS DO BETTER THAN THE OTHERS?
Foreign direct investment (FDI) is an important activity
that helps to integrate the world economy and improve
efficiency. Some ventures are formed to uti l ize
complementary talents and resources from different places
to produce competitive products for the world market, while
others are used as an effective strategy of market entry.
But these ventures can end up with very different
outcomes. Some succeed, some fail. Among the
successful ventures, some perform better than the others.
Why is there a difference and what accounts for the different
performance?
The search for answers to this question has generated
a sizable literature that has focused on a wide array of
variables. But because there are so many potential
explanatory variables, results thus far are mixed.
China has consistently been a target of study because
it is a major recipient of inward FDI. According to figures
released by the United Nations in 1999, China was the
second largest recipient of FDI in the world in the period
from 1993 to 1997, only after the United States. By the
end of 1999, there were over 341,000 foreign invested
enterprises (FIE) in China, with cumulative realized FDI
reaching US$307.5 billion and the contracted amount
reaching US$613.5 billion.
Two HKUST economists, Professors Leonard Cheng
and Changqi Wu, believe that to identify properly the
determinants of the performance of FIEs in China, it is
important to select variables from a unified theoretical
framework based on the economic literature on
organization and management control, transaction costs,
and market structure. Government policies are added to
reflect the economic environment within which firms
operate. A total of eight factors are thus identified (see
Table 1).
An FIE’s performance is measured both in terms of
the firm’s long-term prospects and its shor t-term
profitability. Here, long-term prospect is defined as the
firm’s long-term and non-financial performance as
perceived by its managers while short-term profitability
refers to total profits divided by total sales in the year before
Cheng and Wu conducted their study. The relationship
between the FIE’s performance and the eight explanatory
variables shown in Table 1 is the subject of the study.
THE SURVEY
The data Cheng and Wu used came from a survey of FIEs
located in Guangdong and Hainan provinces with the
assistance of researchers from three universities in
Guangdong and a research institute in Hainan.
Altogether, 350 questionnaires were successfully
collected. Among them, 201 were from equity joint ventures
(foreign investors owning a certain percentage of the
equity), 62 were from contractual joint ventures (foreign
investors’ benefits and obligations were explicitly spelled
out in contractual arrangements) and the rest were from
wholly foreign-owned enterprises. The majority of foreign
investors was from Hong Kong, followed by investors from
the US. The year of venture establishment ranged from
1979 to 1996, with the majority of companies first
registering between 1990 and 1994, a pattern that
resembles that of the general population of FIEs in China.
RESULTS
Quantitative economic research methods were used by
Cheng and Wu to analyze the data collected from the
survey. The analysis shows that some factors have a
stronger correlation with the performance of the surveyed
FIEs than the others. The most obvious are the history of
the FIEs and the firms’ exploitation of China’s comparative
advantages.
According to the researchers, the coefficients of the
natural log of duration of operation are positive and
statistically significant in all cases, meaning that the longer
an FIE has been in operation, the better is its performance
measured both by its long-term prospects and short-term
profitability. As for the exploitation of comparative
advantages, the researchers found that labor-intensive
industries like electronic assembly tend to perform better
than capital-intensive industries like the electrical
equipment and products sector and land-intensive
industries such as agricultural/food industries.
Some factors are found to have a certain impact on
the performance of the FIEs. The
contribution of cash by foreign parent
companies has a signif icantly
positive impact on current profitability
but not on long-term prospects.
Foreign management improves long-
term prospects, but not current
pro f i tab i l i t y. Exper ience as
measured by the number of FIEs
owned by the fore ign parent
companies has a s ign i f icant
contribution to long-term prospects
but not to short-term profitability.
FIEs with relatively more export sales
were found to perform worse than
FIEs that sold more to the domestic
market.
To the researchers’ surprise, the
survey found that FIEs from Hong
Kong did not perform better than FIEs
from other countries and that those
located in the SEZs actual ly
performed significantly worse than
those located outside the zones.
The finding about FIE with Hong
Kong origin is described by the
researchers as a contradiction to the
c o m m o n l y h e l d b e l i e f t h a t
geographical proximity and cultural
similarity between Guangdong and
Hong Kong give Hong Kong investors
substantial competitive advantages.
It is also inconsistent with Hong
Kong’s dominant role as a supplier
o f FDI to Ch ina. A poss ib le
explanation that they offered is that, in the survey, “Hong
Kong” as a variable was positively linked with export
intensity and contribution of equipment by the foreign
parents, neither of which contributed positively to an FIE’s
performance. A second possible explanation is “transfer
pricing”, i.e., the joint ventures pay above-market prices
to their foreign parent companies for imported inputs and
as a result depress the formers’ profits. A third possible
explanation is that many of the so-called Hong Kong
investors were indeed Chinese firms that set up
subsidiaries in Hong Kong in order to acquire the status of
“foreign investors”. Fur ther study in this area is
recommended by the researchers to provide a clearer
answer.
The result about FIEs located in the SEZs, while
unexpected, is regarded by the researchers as reminiscent
of findings of other researchers that FIEs located in Beijing,
Shanghai and Tianjin performed better than those located
in the SEZs. The explanation could be that the non-SEZ
cities in Guangdong such as Guangzhou and its vicinity
not only had cheaper land and labor than the SEZs, but
also were more aggressive in accommodating the
demands of foreign investors.
Changqi Wu
is Assistant
Professor of
Economics at
HKUST
Business
School;
email:
fnchqiwu@
ust.hk
Leonard
Cheng
is Professor
and Head of
Economics
at HKUST
Business
School;
email:
leonard@
ust.hk
RESEARCH
Original research “Determinants of the Performance of Foreign Invested Enterprises in China”
by Leonard Cheng and Changqi Wu
TABLE 1 – Eight Factors Affecting FIE Performance
Organization and Management Control • Contribution of cash, management skills or technology by the foreign
parent relative to the Chinese parent
• The foreign partner’s relative control over the enterprise
Transaction Costs • The origin of foreign investors
• History of the FIE
• Number of FIEs in China owned by the same foreign parent
Market Structure • Proportion of export sales
• Exploitation of China’s comparative advantages
Government Policies • Government-designated location (Special Economic Zones (SEZs)
versus others)
5
HKUST BUSINESS SCHOOL – Newsletter
G lobalization has led many people to
become more sensitive to cultural
diversity. Most of us know that different
things have different meanings to people
in different places. This is especially
important to marketers who push products
across the boundaries of continents. They
have to be sensitive to a lot of things and
the use of color, which plays an influential
role in marketing, is one of the obvious
concerns.
For many years, anecdotal evidence
and some cross-cultural studies have
suggested that different colors should be
used in culturally diverse places because
of the difference in meaning that colors
carry. But more recent research has zeroed
in on an important aspect -- the biological
structures underlying color vision -- that are
common to mankind. Some researchers
argue that because of this commonality,
humans may also share the same color
preferences.
Findings from a recent research by
three prominent researchers in the field,
namely Amitava Chattopadhyay (Associate
Professor of Marketing, University of British
Columbia), Gerald Gorn (Professor of
Marketing, HKUST) and Peter Darke
(Assistant Professor of Marketing,
University of British Columbia), have
provided evidence in support of this theory.
The best-liked color across cultures
according to their research is blue.
WHY BLUE?
An explanation of this preference first has
to start with how colors are identified by
our brains. The researchers pointed out
three dimensions of a color: hue, which
is the pigment of it (red, blue, yellow, etc),
chroma, which is the saturation of it
(highly saturated colors have a greater
proportion of the pigment in them, making
them rich and deep), and value, which
refers to the degree of whiteness or
blackness of a color (low value colors
have a “blackish” quality to them as if the
color black was mixed into the pigment,
high value colors look as if the color white
was mixed into them, making high value
colors pastel-like in appearance). Hue is
where the focus lies in the quest for
common colors.
Simply put, hues are a continuum of
light impacting our eyes (either directly from
a light source or reflected off a surface of
an object). Light transmitted at different
wavelengths is received and interpreted by
EAST, WEST, BLUE IS BEST
the brain as different hues. Previous
research findings have suggested that
humans prefer shorter wavelength hues
such as blue.
There are also suggestions that blue
is preferred because it is a dominant color
in our environment; the sky is blue, as are
large bodies of water, from the sky’s
reflectance, therefore making it the most
universally salient color.
EXPERIMENTS
The Chattopadhyay, Gorn and Darke
survey comprised four studies. The
preference of blue as a color of choice was
confirmed in their first study involving 892
university students from five countries:
Canada, Por tugal, China, India and
Pakistan. The students were asked to write
down thei r favor i te color. Gender
information was also obtained except in the
group of Portugese subjects, which had a
total of 26 students. Results show that there
is far greater homogeneity in hue
preference across countries and gender
than what has been commonly believed.
The second study deals with the other
two dimensions of color, namely, chroma
and value. Data were collected from Hong
Kong and Canada because of the
significant cultural differences that exist in
those two places. Participants in the study
were also university students. They were
shown different versions of a print ad for a
fictitious brand of paint (Figure1). The
chroma (saturation of the pigment) and
value (degree of whiteness
or blackness) of the graphic
color in each version were
modified professionally. A
total of 266 sets of data
(about half from Hong Kong
and half from Canada) were
analyzed.
Results from the test
show an overwhelming
pre fe rence fo r h igher
chroma (more saturated)
colors than lower chroma
colors. Subjects from the two
places also prefer higher
value (more whitish) colors
than lower value colors.
Professor Gerald Gorn
suggested this preference is
also to do with human
physiological responses.
“Higher chroma colors are
richer, more intense and
more likely to stand out. There is also
evidence in other research that the more
saturated a color, the greater the retinal
activity, making the color more exciting,” he
said. As for the preference towards
whiteness, Professor Gorn said that
previous psycho-physiological research
has shown that white light is calming,
therefore the more white a color is, the more
relaxing it is to the person who looks at it.
While the first and second studies
generalize for consumers’ preference at the
receiving end, study three, which looked
at color choices for promotional materials
made by managers in ad agencies,
completes the picture by examining the
preference made at the giving end.
Again, this study used subjects from
Hong Kong and Canada. It focused on
choice of color by managers in advertising
agencies. It showed that actual color
choices made, in a variety of marketing
situations, by those managers reflected
consumer preferences for blue hues and
high chroma. Regarding value: Canadian
managers chose higher value colors,
mirroring consumer preferences while
Hong Kong managers’ choices did not show
a preference for either higher or lower value
colors.
DOES CULTURE MATTER?
While few cultural differences in color
preference were found from studies one
through three, there is no need to throw all
beliefs and anecdotal evidence regarding
Gerald Gorn
is Professor
of Marketing
at HKUST;
email:
mkgorn@
ust.hk.
Original research “Roses are Red and Violets are Blue – Everywhere?
Cultural Universals and Differences in Color Preferences among Consumers and Marketing Managers”
by Amitava Chattopadhyay, Gerald Gorn and Peter R. Darke
cultural difference in
hue preference out of
the window. Study
f o u r o f t h e
Chattopadhyay, Gorn
and Darke research
showed that cultural
differences in hue
p r e f e r e n c e d o
emerge when there
a re c l ea r soc ia l
n o r m s ( s u c h a s
festival traditions)
prescribing appropriate color usage that is
culturally specific.
The study included 92 students from
two ethnic groups, namely Asian and non-
Asian. They were asked to choose the color
they most preferred as wrapping paper for
a gift for a friend for three occasions: a
birthday (non-culturally specific), St.
Patrick’s Day (festival with a clear norm
known internationally for the choice of
green), (Lunar) New Year (clear preference
for red among Asians).
Results show that for birthdays, blue
was the most preferred hue for gift paper
across the board. When (Lunar) New Year
was specified as the occasion for the gift,
red was the most preferred hue by Asians.
As for gift wrapping paper on St. Patrick’s
Day, color preferences for Asians and non-
Asians were the same with green as the
most common choice.
“In a way, conventional wisdom
regarding consumer color preference in
different cultures is still valid to a certain
extent, but it may more reflect natural
human desire to do the right thing rather
than the colors people really like,” said
Professor Gorn. “Insofar as many of us are
devoting our efforts to understand how
people from different cultural backgrounds
are different, findings in this research also
remind us of a very important fact, that
mankind is after all one species and we may
be more similar than we are different.”
The findings of the research suggest
that there is a far greater opportunity for
standardization in the usage of color
globally. This is of particular importance to
marketers. With the advent of the Internet,
people around the world are increasingly
exposed to homogenous marketing
influences such as the same business
websites. The discovery of this common
hue (blue) will go a long way in the
increasing trend of standardized marketing
initiatives across countries.
FIGURE 1 – SAMPLE AD USED IN STUDY TWO
6
The Hong Kong University of Science & Technology
”Angels can fly because they take themselves lightly,” said Professor
Anne Tsui, Founding Director of the Hang Lung Center for Organizational
Research (Hang Lung Center) at the Welcoming Dinner of the Second Chinese
Management Scholar Research Workshop on 19 July. She made this statement
to reiterate the importance of an open mind and not being bound by existing
knowledge, to a group of 43 scholars from 30 major universities of the Mainland
who were about to embark on a week-long program packed with lectures and
group work on research methods.
The workshop, held on the HKUST campus, is an annual event organized
under the auspices of the Hang Lung Center. This year, the Chinese University
of Hong Kong (CUHK) was invited as a co-organizer. The purpose of the
workshop was to introduce modern research methods and techniques to
Mainland scholars.
Dean Yuk-Shee Chan was pleased that the feedback from the 33 participants
of the first workshop held last year was so positive that this time the number of
Mainland scholars was increased to 43. “We are seeing this initiative developing
into a major annual event to be marked on our Mainland counterparts’ diaries.
The result of that will be a continuous exchange and sharing of information and
experience that is important for the advancement of our knowledge about Chinese
business management,” he said.
Throughout the week, participants attended lectures by professors from
HKUST, CUHK, HK University, City University of HK and National Taiwan
University, performed experiments in laboratories, and conducted sample
research projects by applying what they learned from the workshop. In addition,
they met with three of Hang Lung Center’s advisors, Herman Hu, Executive
Director, Ryoden Holdings, David Pong, Managing Director, Shiu Wing Steel
and Michael Tien, Chairman, G2000 (Apparel) during the Welcoming Dinner.
Professor Otto Lin, Vice-President for Research and Development, HKUST
attended the Graduation on 26 July. He congratulated the participants on their
successful completion of the workshop and praised them for their active
involvement in promoting the advancement of research methods used in
Chinese management research.
Professor Larry Farh, Head of Management of Organizations and the
Center’s Co-Director said the workshop has achieved its goals. “The idea of
the workshop is to throw as much information as possible at the participants
but the underlying focus really is to promote more dialogues and exchanges of
views. Therefore the whole event was
purposely set with an informal tone.
Participants were encouraged to adopt an
open attitude and see things from new
angles. It worked out very well and I
believe what they learned from the
workshop will form a solid platform from
which they can take off in their academic
pursuits,” he said.
CHINESE MANAGEMENT SCHOLAR RESEARCHWORKSHOP
PACIS 2000The Four th Pacif ic Asia Conference on
Information Systems (PACIS) was held on the
HKUST campus from 1-3 June. A biannual event
organized by the Department of Information and
Systems Management (ISMT), PACIS is a
prominent regional forum for researchers,
practitioners and policy makers to share the latest
knowledge about and developments in
information systems and technologies.
The theme of PACIS 2000 was “Electronic
Commerce and Web-based Information
Systems”, a topic that has attracted growing
interests among academics as evidenced by the
SUMMER CONFERENCES
Professor Otto Lin addresses the group at theGraduation Dinner.
Pictured in the front row with participants of the workshop are Professors Anne Tsui(center), Larry Farh (fourth from right), and Katherine Xin (fourth from left).
Conference Chair Prof. Kar-Yan Tam, chats withkeynote speakers Chung-Kai Sin (left) and Alan Siu
(center) during a break between sessions.
Prof. Gary Biddle,Head of Accounting
Department,introduces the
speakers (picturedbelow) at the panel
discussion.
The 2000 HKUST Summer Symposium on
Accounting Research was held from 19-22 June.
Each year, the Symposium brings to HKUST
leading scholars from the US, Europe and Asia
to examine a current research topic. This year’s
theme was “Corporate Governance and Control,”
an i s sue o f v i t a l impo r tance t o t he
competitiveness of Hong Kong and Asia in the
new global economy.
The first two days featured talks covering the
empirical and analytical dimensions of corporate
governance by Professor Jerry Zimmerman from
the University of Rochester and Professor Rick
Antle, Associate Dean of the Yale School of
Management. Both are leading researchers in
the field. The third day and the morning of the
fourth featured discussion of ten cutting-edge
research studies presented by leading scholars
from top business schools including Berkeley,
Carnegie-Mellon, Columbia, Duke, Lancaster,
Oregon, UCLA, Vanderbilt, Washington, and
HKUST. As confirmed by these studies, good
corporate governance is a key contributing factor
to company performance, value creation and
economic growth.
The culminating event of the Symposium was
overwhelming response from both speakers and
attendees. Conference Chair and Professor of
ISMT, Kar Yan Tam, was pleased that the
conference had generated widespread attention.
“The conference has become a significant event
in the information systems calendar. It provides
an excellent venue for participants to exchange
ideas and leading-edge work, and it lays the
ground work for constructive collaborations
across borders,” said Professor Tam.
PACIS 2000 was structured into 32 regular
sessions and one panel session with a doctoral
consortium where 21 students from seven
countries spent the first day interacting with
renowned IS scholars. The conference featured
four keynote presentations by Alan Siu, Deputy
Secretary for Information Technology and
Broadcasting of the Hong Kong SAR; the Hon.
C. K. Sin, Legislative Councilor (representing the
IT sector) of Hong Kong; Professor Michael Vitale,
President of the Association for Information
Systems; and Professor Allen Lee, Editor-in-Chief
of MIS Quarterly.
The conference attracted more than 180
attendees.
a distinguished panel discussion spotlighting a
“who’s who” of leading experts and activists in
corporate governance in Asia, including Edward
Chow (pictured below, second from left,
moderator), Executive Chairman, China
Infrastructure Group; Jamie Allen (third from left),
Secretary General, Asian Corporate Governance
Association; Charles Grieve (first from right),
Director of Accounting Policy, Hong Kong
Securities & Futures Commission; Hasung Jang
(third from right), Professor of School of Business
and Management, Korea University; Mike Scales
(first from left), Corporation Secretary, Hong Kong
and Shanghai Banking Corporation; and David
Webb, Editor of Webb-site.com.
All agreed that the 2000 HKUST Summer
Symposium on Accounting Research was a
smashing success.
SUMMER SYMPOSIUM ON ACCOUNTING RESEARCH
7
HKUST BUSINESS SCHOOL – Newsletter
GRADUATE SEES HOPE AMID CHANGES
Changes may bring hopes rather than perils; the key
is that one should face changes head-on and
squarely with a positive attitude. This statement describes
the experience of Andy Yuen (94 MBA) during his six years
at Citibank, which two years ago merged with Travelers to
form Citigroup, the world’s biggest financial-services firm.
Yuen had been working in the equity derivatives division
of Citibank for four years when the merger took place in
1998. “I joined Citibank right after I completed my MBA
program at HKUST. At that time, the market was so vibrant
that no one worried a bit about losing their jobs. That was
so until the end of 1997 when the outburst of the financial
crisis prompted a spate of lay-offs and people, including
myself, began to understand their career might be in peril,”
he said. Then came the news of the merger with Travelers,
which, to most of the employees, implied job losses or at
least impending changes. “My thinking at that time was
that we all have to go through difficulties at some time in
our careers. The most appropriate thing to do was to face
it squarely and to do my best at work,” he said matter-of-
factly.
As it turned out, hard work coupled with a proven track record has stood Yuen in good stead.
Around a year after the merger, he was designated to head up a new department to develop the
warrant business for the bank in Hong Kong. “I feel like I’m running a new company in the sense
that everything had to start from scratch. I have been working hard to keep things rolling. It’s
tough, but it’s also very satisfying to see your effort pan out,” Yuen said.
H azelene Lam’s job as an
equity salesperson at Merrill
Lynch has never been short on
challenges. Market fluctuations aside,
Lam has to tackle many other
daunting problems everyday. One
challenge is actually what most of us
wrestle with day in and day out -
information overflow.
Lam joined Merrill Lynch after
graduating from HKUST with a BBA
degree in finance three years ago.
“Simply put, my work is to propose
investment strategy to our institutional
clients. To do that, I have to rake
through research done by our analysts
and bone up on market news collected
from different sources, then come up
with my own analysis and recom-
mendations. Even if I never took time
away to eat and sleep, I could never
get through the ocean of information,
let alone the highly demanding
analysis work that comes after it,” she
EFFECTIVE TIME MANAGEMENTBRINGS SUCCESS
said.
In fact, the job requires more than
that. “Relationship building is one of
the linchpins for success in this
industry. Investing time in clients is
inevitable,” said Lam.
When asked how to deal with
such a tall order, Lam has a simple
a n d t w o - w o r d a n s w e r : t i m e
management. “Multi-tasking and
being selective is very important.
This requires a very quick mind and
a good sense of judgement too,”
she exp la ined. Cer ta in ly , the
formula for a successful equity
expert could go on and on. Such
qualities as maturity, an outgoing
personal i ty, being trustworthy,
having strong communication and
language skil ls, and of course,
financial smarts are of the essence.
“Above all, you have to love the job
or you would never have the energy
to keep you going.”
ALUMNI NEWS
Dean Yuk-Shee Chan (right) and Steve Yan, Managing Director of Edport shake hands aftersigning the agreement at the launch ceremony.
of the HKUST Business School in
eCommerce research and teaching and
Edport in eLearning technologies, made
possible the development of these high
quality web-based eCommerce courses
tailored for the needs of the Asian
business and IT executives,” he said.
Edport’s managing director Steve
Yan said the key benefit of these online
courses is that they allow participants
to learn anytime and anywhere at their
own pace and needs. The innovative
and user-friendly features of these
courses are designed with the aim of
balancing the needs of busy executives
to acquire new knowledge within tight
constraint of time.
“The online Professional Certificate
courses will be launched in Hong Kong
initially, followed by the Greater China
region later this year, and then extended
to other regions in the world next year
to meet the demand for “just-in-time”
learning by working professionals and
corporations,” he said.
The cost for each course of the
NEW NAME FORAN ENHANCEDDIPLOMA PROGRAM
he School's highly popular Graduate
Diploma in Management (GDM) program
has been renamed the Executive Diploma in
Management (EDM) program.
Under the new name, the EDM program
combines former GDM program modules with
several new modules including Entrepreneurship,
and Leadership & Management of Change. A
series of luncheon talks on key economic issues
are added this year to keep participants up to date
on the changing global business environment.
Professor Gary Biddle, EDM Academic
Director said, "EDM has the advantage and
flexibility to react quickly to changes in the business
environment. By making available some of the best
elements in the School's world-class degree
programs to the business community, the program
presents a high-quality management education
program to working executives in an efficient and
effective format."
The EDM program for year 2000-01 is
scheduled to start in November 2000 and expected
to finish by mid-June 2001. For inquiries please
contact the EDM Office by email: execprog@ust.
hk. Website: www.bm.ust.hk/execprog
EXECUTIVE EDUCATION
T
LAUNCH OF PROFESSIONAL CERTIFICATE INE-COMMERCE ONLINE PROGRAM
program is HK$3,800. Participants who
successfully complete all four courses
will be granted a Professional Certificate
in eCommerce (Online) by the HKUST
Business School.
(cont’d from page 1)
For registration or inquiries, please
visit the School’s website (www.bm.ust.
hk/exed) or Edport.com (www.edport.
com).
8
The Hong Kong University of Science & Technology HKUST Business SCHOOL – Newsletter
M BA Year-Two student Regina Wong,
together with 7 other team members,
were the top winners in the IBM Gen-I Challenge
2000 Program, an eBusiness competition open
to all local university students. The winners each
received HK$8,000 cash prize and were invited
to participate in the “IBM eBusiness Project” as
interns for a 6-week period.
The program ran from June to July and was
divided into three phases. First, applicants had
to submit a write-up on their internet business
aspiration. Finalists were short-listed to
participate in the second phase - the “Net
Generation IQ-EQ Challenge”, which included a
one-day company visit and pre-camp briefing on
eBusiness trends and IBM’s technologies
enabling business and a two-day-one-night
camp to take part in an eBusiness design
HANDS-ON LEARNING FOR GEN-I CHALLENGE WINNERS
Some 100 sixth formers from
21 local secondary schools
attending the School’s Summer
Study Program were reminded of
the importance of life-long learning
by Matthew Cheung Kin-chung,
Director of Education, and guest
speaker at the Program’s gala
dinner, who likened learning to
charging a battery.
“Two decades ago the
“battery” people had after earning
their first degree was probably
powerful enough for career
development over a long time, but
with the advances in technology
nowadays and the globalization of
the world economy, one must
keep recharging this battery with
n e w k n o w l e d g e t o s t a y
competitive,” he said.
The gala dinner was one of the
activities punctuating the five-day
Summer Study Program (31 July-
4 August) that featured lectures
and seminars by HKUST business
professors. In addit ion, the
participants visited two local
STUDENTS
Chinese language newspaper
operations, discussed issues with
students at Singapore’s Nanyang
Technology University via a video-
conferencing link, and took part in
laboratory exper iments and
various specially designed sports
and team-building games.
T h e P r o g ra m wa s c o -
organized by the School ’s
E c o n o m i c s a n d F i n a n c e
Departments. While the main
focus was on these two subjects,
the lectures and seminars were
broadened to include other
business-related topics such as
the Internet and eCommerce.
The overall arrangement of
t h e P r o g r a m s a w a c t i ve
participation from across the
School. The organizing committee
comprised six undergraduate
s tudents represent ing the
Business Students’ Union (BSU),
Economics Students’ Society and
Finance Students’ Society, and
Karen Liu, Assistant to the Dean
and Leonna Tong, Executive
O f f i c e r o f t h e
E c o n o m i c s
D e p a r t m e n t .
Professors Francis
Lui of Economics and
W i l s o n To n g o f
F i n a n c e ( a l s o
Associate Director of
the Undergraduate
Programs) were the
committee’s advisors.
F r o m t h e
drawing board to
actual implementation, the camp
required eight months of hard
work from this team of organizers.
During the course of the Program,
some 30 more HKUST business
students were involved as team
l e a d e r s a n d l o g i s t i c s
coordinators.
Feedback from participants
was more than encouraging.
Anthony Pang of La Salle College
said he was most impressed with
HKUST’s state-of-the-art facilities.
Penny Yeung o f St . Pau l ’s
Secondary School said she had
heard a lot about the School’s
achievements before she came
but the Program allowed her to see
for herself the various elements,
including facilities, professors and
students , that made these
achievements possible. Yeung’s
schoolmate Helen Chow said she
most liked the interactive teaching
style of the professors who were
involved with the lectures and
seminars.
All in all, the participants felt
they were able to learn more about
H K U S T a n d b u s i n e s s
adminis t rat ion as a h igher
education subject. They also
agreed that this “glimpse” of
un ive rs i t y l i fe was a ver y
in te res t i ng exper ience fo r
them.
Joanne Wong, Academic
Secretar y o f BSU and the
organizing committee of the
Program, said it had been a lot of
work but it was all worth it. “It was
SUMMER CAMP PARTICIPANTS TOLD TO “KEEP CHARGING YOUR BATTERIES”
competition. In the end, the winning team would
receive thorough training on IBM eBusiness
products and solution and take part in a
placement project.
“It was a valuable learning experience. We
talked to many people who came from different
backgrounds and were actually mavens in the
industry. Having to present to these people really
forced us to fine-tune our business plan and
honed our presentation skills. In addition, the
chance to work for the sponsoring company also
provided me a special opportunity to get hands-
on experience in eBusiness,” said Wong.
Wong was also in the champion team in
another inter-university competition, Advertising
Competition Express, held earlier this year. The
team comprised three MBA and one MSc
students of the School.
2nd row far left: Dennis Yue, Advisory Sales Specialist, IBM China/HK2nd row 2nd from right: Regina Wong
far right: Tong Tai, General Manager, IBM China/HK.
Activities...
a very value-adding experience. I
think my fellow students will agree
with me that in the end not only
the par t icipating secondary
students were able to learn from
Group phototime...
Learning time...
the Program, but we as organizers
a lso had our bat ter ies (o f
knowledge and skill) charged
through our involvement with the
event,” she said.
Guest speaker of the programMatthew Cheung, Director of Education (right)
receives a souvenir from Dean Yuk-Shee Chan.
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